Broadband Internet and Common Carrier Service
Bob Ellis
March 2004
Revised January 2005
The availability and adoption of broadband (high-speed) Internet service is of critical importance to the computing and telecommunications industries and the country. Graphically intensive applications such as remote medical diagnosis, enhanced e-commerce, personal data exchanges (e.g., sharing family photos and videos), delivery of entertainment and gaming and augmented user interfaces (e.g., a, possibly 3D, graphical view of where the user is in a web structure would address the “lost in cyberspace” problem) are highly dependent on the widespread deployment of broadband. In addition, broadband shows great promise for inexpensive yet powerful distributed computation utilizing widely geographically separated computers.
I believe the best way to provide widespread broadband Internet services is by meaningful competition. At the same time the interests of the public using this essential form of communication must be served. One possible mechanism to provide both competition and serve the public interest is to classify Internet services as common carrier services.
The Internet is primarily a communication medium
The Internet is an essential medium for the delivery of electronic mail, privately produced visual material, commercial exchange, education/training, academic discourse and health, research and political information. For example, the opinion of the special three-judge federal court in Philadelphia that first rejected the (1996) Communications Decency Act called the Internet "... the most participatory form of mass speech yet developed." And again proved by the popularity of the self-publishing web logging (blogging) phenomenon, which has been described by Dan Gillmor of the San Jose Mercury News as “… emerging brand of Internet-based journalism that is helping shape the future of news“.
The “killer app” for broadband is not the delivery of movies
I believe many different applications will induce people to move to broadband. These include sharing personal digital pictures (and eventually videos), transmission of high-quality medical images to under served areas (after broadband implementation issues to these areas are solved), enhanced e-commerce, online/interactive gaming, access to entertainment such as motion pictures and education/training.
For example, with digital photography becoming widely used many people would like to share their photos with friends and family. The easiest way to do this is by email attachments (as opposed to setting up a website, etc.), but a large set of photos would soon result in long uploads and downloads via dial-up, even when transmitted at typical display-screen resolutions. Of course many people would probably like to send high-resolution pictures so the recipients could print them. If this was successful, I believe sharing home videos would be next.
Security, privacy and reliability
The always-on, high-speed nature of broadband Internet services make such connections attractive to people looking to break into a computer. In order for the public to be able to use these services without jeopardizing the security and privacy of their computers and personal data, it is critical that providers make available easy to use and understand facilities (e.g., firewalls) to protect their customers.
In keeping with the Internet’s primary use as a medium for critical communication in many forms, such services must maintain high availability. Unlike entertainment, the key uses of the Internet are not optional and users will not utilize these services unless they are reliably available.
Important challenges include the development and use of quantifiable measures that provide customers and policy makers with a solid basis for comparing provider performance and continued research on security, privacy and reliability.
Affordability
It is becoming clear that most potential customers will not pay a significant premium for broadband. Before there is widespread adoption, prices must be comparable to current dial up Internet access. Current dial up customers who have a second phone line for Internet access might be willing to pay more because they would be able to discontinue the second phone line.
The best way to provide affordable services is to have meaningful competition among several (more than two) providers. The challenge here is to reduce regulation and constraints on providers while guaranteeing an appropriate level of consumer protection.
IP/DRM
I believe the mandated adoption of technical and legal measures to protect current business models of threatened industries would cause widespread damage to the economy and society at large. Broadband offers many opportunities to adopt new business models, as was proposed in a Dec. 2, 2002 editorial in the Wall Street Journal.
Internet deregulation and common carriage
I believe that a competition-friendly environment is the best way to increase the availability and adoption of broadband Internet services. But the interests of the public must be maintained. In particular the right of the public to speak and have their voices heard is critical.
Dial-up telephone service is designated as a common carrier service. Quoting Eli M. Noam, Professor of Finance and Economics Columbia University, Graduate School of Business, “[The originators of common carriage] intended to guarantee that no customer seeking service upon reasonable demand, willing and able to pay the established price, however set, would be denied lawful use of the service or would otherwise be discriminated against. In return for reduced discretion, a carrier obtained certain benefits, including limited liability for the consequences of its own actions.” (See the appendix for additional citations and information on common carriage.)
I believe the solution to providing protection for the interests of the public and minimum government intervention in all Internet services is to make them common carrier services. Note that this may impact the current terms of service used by many service providers that attempt to forbid a broad range of unwanted online behavior. These terms include, but are not limited to: bans on “flaming“, harassment, sending bulk unsolicited commercial email (spam), reverse engineering, bandwidth “hogging”, malicious conduct, etc. I believe some items (such as bandwidth limitations) could be built into the contract, while others (such as control over content) could not.
Note that common carriage does not mean that all customers would have to be treated equally. Different levels of service (such as bandwidth availability) could be provided based on price. But for any given level of service all customers (including information providers) would have to be treated equally. Common carriage also does not imply universal service, regulated rates or other similar features; these could be added by legislation and regulation if desired.
Recent concerns about national security raise special issues. The investigation, prosecution, and punishment of those engaged in illegal activity by law enforcement acting under court supervision should be preserved while protecting the rights of law abiding citizens. ISPs should never hinder the delivery of a message or communication even if they suspect it to be associated with a criminal or potential terrorist act, unless the delivery of the message would result in physical injury or death to a person or persons or create economic harm. Nothing should mandate that ISPs use technical means to read messages (i.e. sniffers or search applications) to look for key words or phrases except under strict court supervision.
Appendix: Quotes on Common Carriage
http://www.columbia.edu/dlc/wp/citi/citinoam11.html
Beyond Liberalization II: The Impending Doom of Common Carriage
Eli M. Noam Professor of Finance and Economics Columbia University, Graduate School of Business
[The originators of common carriage] intended to guarantee that no customer seeking service upon reasonable demand, willing and able to pay the established price, however set, would be denied lawful use of the service or would otherwise be discriminated against. In return for reduced discretion, a carrier obtained certain benefits, including limited liability for the consequences of its own actions.
The following factors are important in determining common carriage:
Service is regular
Customers are not readily predictable and are changeable,
The carrier solicits business from the general public, for example by advertising
Law and regulations define the responsibilities of the parties.
The duty to carry does not mean that a carrier cannot refuse service, such as in circumstances of potential damage, unreasonably high risks, or beyond a reasonable capacity.
Carriers offering services only to a limited group of users have been held to be still common carriers for that limited group of users.
The common carrier system has served telecommunications participants well: it has permitted society to entrust its vital highways of information to for-profit companies, without the specter of unreasonable discrimination and censorship by government or private monopolies; it was an important element in establishing a free flow of information, neutral as to its content; it reduced the administrative cost and the burden of liability of a carrier, since it needed not, at least in theory, inquire as to a user's background and intended use; and it protected the telephone industry from various pressure groups who would prevent it from offering service to their targets of protest or competition.
Among its purposes are the following:
Reduction of Market Power
Assurance of Essential Services
Spread of Basic Infrastructure
Reduction in Transaction Cost
Limited Liability
Extension of Basic Freedoms - Personal and Commercial
Facilitation of Competition
Interconnectivity
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http://www.democraticmedia.org/news/cableModemBrief.html
Public Interest Groups File Brief
Against FCC Cable Ruling
15 October 2002 -- The Center for Digital Democracy and other public interest groups submitted arguments on 10 Oct in a lawsuit challenging the FCC's decision to classify cable broadband as an "information service."
Public Interest Petitioners concur with Petitioners Brand X and Earthlink that this court can and should reverse the decision below because, a matter of law, Internet access includes a common carriage, telecommunications service component.
The record contained considerable material pertaining to how particular classifications of Internet access might permit discriminatory practices that would impede free speech and expression and limit the Internet's potential to serve as "'a unique and wholly new medium of worldwide human communication.'" Reno v. ACLU, 521 U.S. 844, 851 (1997)(footnote omitted).
The Internet flourished into the medium Americans know today over telephone lines regulated as common carriers. These lines were not allowed to discriminate on content. Indeed, the characteristics of the Internet, in contrast with other mass media, demonstrate that it is the low barriers to entry and the non-exclusive nature of Internet speech that make the Internet a paradigmatic First Amendment ideal.
Common carriage is the most compatible with the First Amendment because it removes both the government and private parties from content decisions.
The "dial up" Internet has grown under its non-discriminatory regime and compare it with vertically integrated media industries that do not separate "content" and "conduit" and afford those who operate the facilities the ability to control content and discriminate against competitors in permitting access.
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http://www.democraticmedia.org/primer.html
Broadband Primer
What is Broadband?
What does "Common Carriage" refer to?
Dial-up modems allow for the transfer of information over phone lines,
and are thus governed by a set of nondiscrimination rules applying to
telephone networks. Mirroring the US policy for the public highways,
the telephone industry has been required to serve consumers as
"Common Carriers." The policies of common carriage--particularly the
requirement that phone companies not discriminate against information
by halting, slowing, or otherwise tampering with the transfer of
data--have been central to the growth of the Internet into a diverse,
competitive medium. Common carriage permitted the development of
the Internet Service Provider (ISP) marketplace, affording users the
opportunity to go online via one of the more than 7,000 companies
that compete with such giants as AOL and Microsoft.
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http://china.si.umich.edu/econ495/writings/memo2-version2/potter.html
Memo 2 - The Future of Common Carriage
A report by Mark Potter
March 29, 1995
Economics 495 - Prof. Mackie-Mason
Common carriage, a regulatory system designed originally to guarantee egalitarianism in the provision of public services, cannot persist in its current form. Deregulation has paved the way for an increasingly competitive communications market, one where contract carriers will have open access to the common carrier's domain.
What is Common Carriage?
Common carriage, to clarify, is not synonymous with universal service, regulated monopoly, or public utility. The principle of common carriage is that, for a given service network, no one willing to pay the given price can be denied service. The common carrier is allowed to set the price at whatever level it wishes, the only stipulation being that whatever price it chooses it must offer to everyone. In economic parlance, the common carrier cannot price discriminate. Contract carriers, on the other hand, are by definition bound to service obligations by contracts, and not by common law, as is generally the case with common carriers. Generally speaking, common carriers offer regular service, serve customers which are not readily predictable, and solicit business from the general public. In contrast contract carriers may have occasional service, have a stable clientele, and solicit customers on a targeted and individualized basis (see Noam, The Impending Doom of Common Carriage). The unique nature of the common carrier mandate gives rise to some interesting benefits and problems.
Benefits of common carriage:
Encourage interconnection by forcing carriers to accept traffic at the set price (as long as there exists enough capacity, …).
Encourage competition and interconnectivity by eliminating incentives for predatory pricing schemes and/ or refusal of service to competitors; firms are forced to use quality and price as incentives for attracting customers.
Produce a content-neutral network, upholding the traditional principle of free speech.
In return for relinquishing control of pricing decisions and agreeing to uphold network integrity, the common carrier is absolved of many of the responsibilities of operating an information network, such as price equity and traffic content issues.